§ 16-107.6

Illinois § 16-107.6

• Jurisdiction: Illinois
• Topic: REGULATION
• Ch. 220: UTILITIES
• Act 220 ILCS 5/: Public Utilities Act.
• Art.: Article XVI - Electric Service Customer Choice And Rate Relief Law Of 1997

Text

(Text of Section before amendment by P.A. 104-458 ) Sec. 16-107.6. Distributed generation rebate. (a) In this Section: "Additive services" means the services that distributed energy resources provide to the energy system and society that are not (1) already included in the base rebates for system-wide grid services; or (2) otherwise already compensated. Additive services may reflect, but shall not be limited to, any geographic, time-based, performance-based, and other benefits of distributed energy resources, as well as the present and future technological capabilities of distributed energy resources and present and future grid needs. "Distributed energy resource" means a wide range of technologies that are located on the customer side of the customer's electric meter, including, but not limited to, distributed generation, energy storage, electric vehicles, and demand response technologies. "Energy storage system" means commercially available technology that is capable of absorbing energy and storing it for a period of time for use at a later time, including, but not limited to, electrochemical, thermal, and electromechanical technologies, and may be interconnected behind the customer's meter or interconnected behind its own meter. "Smart inverter" means a device that converts direct current into alternating current and meets the IEEE 1547-2018 equipment standards. Until devices that meet the IEEE 1547-2018 standard are available, devices that meet the UL 1741 SA standard are acceptable. "Subscriber" has the meaning set forth in Section 1-10 of the Illinois Power Agency Act. "Subscription" has the meaning set forth in Section 1-10 of the Illinois Power Agency Act. "System-wide grid services" means the benefits that a distributed energy resource provides to the distribution grid for a period of no less than 25 years. System-wide grid services do not vary by location, time, or the performance characteristics of the distributed energy resource. System-wide grid services include, but are not limited to, avoided or deferred distribution capacity costs, resilience and reliability benefits, avoided or deferred distribution operation and maintenance costs, distribution voltage and power quality benefits, and line loss reductions. "Threshold date" means December 31, 2024 or the date on which the utility's tariff or tariffs setting the new compensation values established under subsection (e) take effect, whichever is later. (b) An electric utility that serves more than 200,000 customers in the State shall file a petition with the Commission requesting approval of the utility's tariff to provide a rebate to the owner or operator of distributed generation, including third-party owned systems, that meets the following criteria: (1) has a nameplate generating capacity no greater than 5,000 kilowatts and is primarily used to offset a customer's electricity load; (2) is located on the customer's side of the billing meter and for the customer's own use; (3) is interconnected to electric distribution facilities owned by the electric utility under rules adopted by the Commission by means of one or more inverters or smart inverters required by this Section, as applicable. For purposes of this Section, "distributed generation" shall satisfy the definition of distributed renewable energy generation device set forth in Section 1-10 of the Illinois Power Agency Act to the extent such definition is consistent with the requirements of this Section. In addition, any new photovoltaic distributed generation that is installed after June 1, 2017 (the effective date of Public Act 99-906) must be installed by a qualified person, as defined by subsection (i) of Section 1-56 of the Illinois Power Agency Act. The tariff shall include a base rebate that compensates distributed generation for the system-wide grid services associated with distributed generation and, after the proceeding described in subsection (e) of this Section, an additional payment or payments for the additive services. The tariff shall provide that the smart inverter or smart inverters associated with the distributed generation shall provide autonomous response to grid conditions through its default settings as approved by the Commission. Default settings may not be changed after the execution of the interconnection agreement except by mutual agreement between the utility and the owner or operator of the distributed generation. Nothing in this Section shall negate or supersede Institute of Electrical and Electronics Engineers equipment standards or other similar standards or requirements. The tariff shall not limit the ability of the smart inverter or smart inverters or other distributed energy resource to provide wholesale market products such as regulation, demand response, or other services, or limit the ability of the owner of the smart inverter or the other distributed energy resource to receive compensation for providing those wholesale market products or services. (b-5) Within 30 days after the effective date of this amendatory Act of the 102nd General Assembly, each electric public utility with 3,000,000 or more retail customers shall file a tariff with the Commission that further compensates any retail customer that installs or has installed photovoltaic facilities paired with energy storage facilities on or adjacent to its premises for the benefits the facilities provide to the distribution grid. The tariff shall provide that, in addition to the other rebates identified in this Section, the electric utility shall rebate to such retail customer (i) the previously incurred and future costs of installing interconnection facilities and related infrastructure to enable full participation in the PJM Interconnection, LLC or its successor organization frequency regulation market; and (ii) all wholesale demand charges incurred after the effective date of this amendatory Act of the 102nd General Assembly. The Commission shall approve, or approve with modification, the tariff within 120 days after the utility's filing. (c) The proposed tariff authorized by subsection (b) of this Section shall include the following participation terms for rebates to be applied under this Section for distributed generation that satisfies the criteria set forth in subsection (b) of this Section: (1) The owner or operator of distributed generation that services customers not eligible for net metering under subsection (d), (d-5), or (e) of Section 16-107.5 of this Act may apply for a rebate as provided for in this Section. Until the threshold date, the value of the rebate shall be $250 per kilowatt of nameplate generating capacity, measured as nominal DC power output, of that customer's distributed generation. To the extent the distributed generation also has an associated energy storage, then the energy storage system shall be separately compensated with a base rebate of $250 per kilowatt-hour of nameplate capacity. Any distributed generation device that is compensated for storage in this subsection (1) before the threshold date shall participate in one or more programs determined through the Multi-Year Integrated Grid Planning process that are designed to meet peak reduction and flexibility. After the threshold date, the value of the base rebate and additional compensation for any additive services shall be as determined by the Commission in the proceeding described in subsection (e) of this Section, provided that the value of the base rebate for system-wide grid services shall not be lower than $250 per kilowatt of nameplate generating capacity of distributed generation or community renewable generation project. (2) The owner or operator of distributed generation that, before the threshold date, would have been eligible for net metering under subsection (d), (d-5), or (e) of Section 16-107.5 of this Act and that has not previously received a distributed generation rebate, may apply for a rebate as provided for in this Section. Until the threshold date, the value of the base rebate shall be $300 per kilowatt of nameplate generating capacity, measured as nominal DC power output, of the distributed generation. The owner or operator of distributed generation that, before the threshold date, is eligible for net metering under subsection (d), (d-5), or (e) of Section 16-107.5 of this Act may apply for a base rebate for an associated energy storage device behind the same retail customer meter as the distributed generation, regardless of whether the distributed generation applies for a rebate for the distributed generation device. The energy storage system shall be separately compensated at a base payment of $300 per kilowatt-hour of nameplate capacity. Any distributed generation device that is compensated for storage in this subsection (2) before the threshold date shall participate in a peak time rebate program, hourly pricing program, or time-of-use rate program offered by the applicable electric utility. After the threshold date, the value of the base rebate and additional compensation for any additive services shall be as determined by the Commission in the proceeding described in subsection (e) of this Section, provided that, prior to December 31, 2029, the value of the base rebate for system-wide services shall not be lower than $300 per kilowatt of nameplate generating capacity of distributed generation, after which it shall not be lower than $250 per kilowatt of nameplate capacity. The eligibility of energy storage devices that are interconnected behind the same retail customer meter as the distributed generation shall not be limited to energy storage devices interconnected after the effective date of this amendatory Act of the 103rd General Assembly. To the extent that an electric utility's tariffs are inconsistent with the requirements of this paragraph (2) as modified by this amendatory Act of the 103rd General Assembly, such electric utility shall, within 30 days, file modified tariffs consistent with the requirements of this paragraph (2). (3) Upon approval of a rebate application submitted under this subsection (c), the retail customer shall no longer be entitled to receive any delivery service credits for the excess electricity generated by its facility and shall be subject to the provisions of subsection (n) of Section 16-107.5 of this Act unless the owner or operator receives a rebate only for an energy storage device and not for the distributed generation device. (4) To be eligible for a rebate described in this subsection (c), the owner or operator of the distributed generation must have a smart inverter installed and in operation on the distributed generation. (d) The Commission shall review the proposed tariff authorized by subsection (b) of this Section and may make changes to the tariff that are consistent with this Section and with the Commission's authority under Article IX of this Act, subject to notice and hearing. Following notice and hearing, the Commission shall issue an order approving, or approving with modification, such tariff no later than 240 days after the utility files its tariff. Upon the effective date of this amendatory Act of the 102nd General Assembly, an electric utility shall file a petition with the Commission to amend and update any existing tariffs to comply with subsections (b) and (c). (e) By no later than June 30, 2023, the Commission shall open an independent, statewide investigation into the value of, and compensation for, distributed energy resources. The Commission shall conduct the investigation, but may arrange for experts or consultants independent of the utilities and selected by the Commission to assist with the investigation. The cost of the investigation shall be shared by the utilities filing tariffs under subsection (b) of this Section but may be recovered as an expense through normal ratemaking procedures. (1) The Commission shall ensure that the investigation includes, at minimum, diverse sets of stakeholders; a review of best practices in calculating the value of distributed energy resource benefits; a review of the full value of the distributed energy resources and the manner in which each component of that value is or is not otherwise compensated; and assessments of how the value of distributed energy resources may evolve based on the present and future technological capabilities of distributed energy resources and based on present and future grid needs. (2) The Commission's final order concluding this investigation shall establish an annual process and formula for the compensation of distributed generation and energy storage systems, and an initial set of inputs for that formula. The Commission's final order concluding this investigation shall establish base rebates that compensate distributed generation, community renewable generation projects and energy storage systems for the system-wide grid services that they provide. Those base rebate values shall be consistent across the state, and shall not vary by customer, customer class, customer location, or any other variable. With respect to rebates for distributed generation or community renewable generation projects, that rebate shall not be lower than $250 per kilowatt of nameplate generating capacity of the distributed generation or community renewable generation project. The Commission's final order concluding this proceeding shall also direct the utilities to update the formula, on an annual basis, with inputs derived from their integrated grid plans developed pursuant to Section 16-105.17. The base rebate shall be updated annually based on the annual updates to the formula inputs, but, with respect to rebates for distributed generation or community renewable generation projects, shall be no lower than $250 per kilowatt of nameplate generating capacity of the distributed generation or community renewable generation project. (3) The Commission shall also determine, as a part of its investigation under this subsection, whether distributed energy resources can provide any additive services. Those additive services may include services that are provided through utility-controlled responses to grid conditions. If the Commission determines that distributed energy resources can provide additive grid services, the Commission shall determine the terms and conditions for the operation and compensation of those services. That compensation shall be above and beyond the base rebate that the distributed energy generation, community renewable generation project and energy storage system receives. Compensation for additive services may vary by location, time, performance characteristics, technology types, or other variables. (4) The Commission shall ensure that compensation for distributed energy resources, including base rebates and any payments for additive services, shall reflect all reasonably known and measurable values of the distributed generation over its full expected useful life. Compensation for additive services shall reflect, but shall not be limited to, any geographic, time-based, performance-based, and other benefits of distributed generation, as well as the present and future technological capabilities of distributed energy resources and present and future grid needs. (5) The Commission shall consider the electric utility's integrated grid plan developed pursuant to Section 16-105.17 of this Act to help identify the value of distributed energy resources for the purpose of calculating the compensation described in this subsection. (6) The Commission shall determine additional compensation for distributed energy resources that creates savings and value on the distribution system by being co-located or in close proximity to electric vehicle charging infrastructure in use by medium-duty and heavy-duty vehicles, primarily serving environmental justice communities, as outlined in the utility integrated grid planning process under Section 16-105.17 of this Act. No later than 60 days after the Commission enters its final order under this subsection (e), each utility shall file its updated tariff or tariffs in compliance with the order, including new tariffs for the recovery of costs incurred under this subsection (e) that shall provide for volumetric-based cost recovery, and the Commission shall approve, or approve with modification, the tariff or tariffs within 240 days after the utility's filing. (f) Notwithstanding any provision of this Act to the contrary, the owner or operator of a community renewable generation project as defined in Section 1-10 of the Illinois Power Agency Act shall also be eligible to apply for the rebate described in this Section. The owner or operator of the community renewable generation project may apply for a rebate only if the owner or operator, or previous owner or operator, of the community renewable generation project has not already submitted an application, and, regardless of whether the subscriber is a residential or non-residential customer, may be allowed the amount identified in paragraph (1) of subsection (c) applicable on the date that the application is submitted. (g) The owner of the distributed generation or community renewable generation project may apply for the rebate or rebates approved under this Section at the time of execution of an interconnection agreement with the distribution utility and shall receive the value available at that time of execution of the interconnection agreement, provided the project reaches mechanical completion within 24 months after execution of the interconnection agreement. If the project has not reached mechanical completion within 24 months after execution, the owner may reapply for the rebate or rebates approved under this Section available at the time of application and shall receive the value available at the time of application. The utility shall issue the rebate no later than 60 days after the project is energized. In the event the application is incomplete or the utility is otherwise unable to calculate the payment based on the information provided by the owner, the utility shall issue the payment no later than 60 days after the application is complete or all requested information is received. (h) An electric utility shall recover from its retail customers all of the costs of the rebates made under a tariff or tariffs approved under subsection (d) of this Section, including, but not limited to, the value of the rebates and all costs incurred by the utility to comply with and implement subsections (b) and (c) of this Section, but not including costs incurred by the utility to comply with and implement subsection (e) of this Section, consistent with the following provisions: (1) The utility shall defer the full amount of its costs as a regulatory asset. The total costs deferred as a regulatory asset shall be amortized over a 15-year period. The unamortized balance shall be recognized as of December 31 for a given year. The utility shall also earn a return on the total of the unamortized balance of the regulatory assets, less any deferred taxes related to the unamortized balance, at an annual rate equal to the utility's weighted average cost of capital that includes, based on a year-end capital structure, the utility's actual cost of debt for the applicable calendar year and a cost of equity, which shall be calculated as the sum of (i) the average for the applicable calendar year of the monthly average yields of 30-year U.S. Treasury bonds published by the Board of Governors of the Federal Reserve System in its weekly H.15 Statistical Release or successor publication; and (ii) 580 basis points, including a revenue conversion factor calculated to recover or refund all additional income taxes that may be payable or receivable as a result of that return. When an electric utility creates a regulatory asset under the provisions of this paragraph (1) of subsection (h), the costs are recovered over a period during which customers also receive a benefit, which is in the public interest. Accordingly, it is the intent of the General Assembly that an electric utility that elects to create a regulatory asset under the provisions of this paragraph (1) shall recover all of the associated costs, including, but not limited to, its cost of capital as set forth in this paragraph (1). After the Commission has approved the prudence and reasonableness of the costs that comprise the regulatory asset, the electric utility shall be permitted to recover all such costs, and the value and recoverability through rates of the associated regulatory asset shall not be limited, altered, impaired, or reduced. To enable the financing of the incremental capital expenditures, including regulatory assets, for electric utilities that serve less than 3,000,000 retail customers but more than 500,000 retail customers in the State, the utility's actual year-end capital structure that includes a common equity ratio, excluding goodwill, of up to and including 50% of the total capital structure shall be deemed reasonable and used to set rates. (2) The utility, at its election, may recover all of the costs as part of a filing for a general increase in rates under Article IX of this Act, as part of an annual filing to update a performance-based formula rate under subsection (d) of Section 16-108.5 of this Act, or through an automatic adjustment clause tariff, provided that nothing in this paragraph (2) permits the double recovery of such costs from customers. If the utility elects to recover the costs it incurs under subsections (b) and (c) through an automatic adjustment clause tariff, the utility may file its proposed tariff together with the tariff it files under subsection (b) of this Section or at a later time. The proposed tariff shall provide for an annual reconciliation, less any deferred taxes related to the reconciliation, with interest at an annual rate of return equal to the utility's weighted average cost of capital as calculated under paragraph (1) of this subsection (h), including a revenue conversion factor calculated to recover or refund all additional income taxes that may be payable or receivable as a result of that return, of the revenue requirement reflected in rates for each calendar year, beginning with the calendar year in which the utility files its automatic adjustment clause tariff under this subsection (h), with what the revenue requirement would have been had the actual cost information for the applicable calendar year been available at the filing date. The Commission shall review the proposed tariff and may make changes to the tariff that are consistent with this Section and with the Commission's authority under Article IX of this Act, subject to notice and hearing. Following notice and hearing, the Commission shall issue an order approving, or approving with modification, such tariff no later than 240 days after the utility files its tariff. (i) An electric utility shall recover from its retail customers, on a volumetric basis, all of the costs of the rebates made under a tariff or tariffs placed into effect under subsection (e) of this Section, including, but not limited to, the value of the rebates and all costs incurred by the utility to comply with and implement subsection (e) of this Section, consistent with the following provisions: (1) The utility may defer a portion of its costs as a regulatory asset. The Commission shall determine the portion that may be appropriately deferred as a regulatory asset. Factors that the Commission shall consider in determining the portion of costs that shall be deferred as a regulatory asset include, but are not limited to: (i) whether and the extent to which a cost effectively deferred or avoided other distribution system operating costs or capital expenditures; (ii) the extent to which a cost provides environmental benefits; (iii) the extent to which a cost improves system reliability or resilience; (iv) the electric utility's distribution system plan developed pursuant to Section 16-105.17 of this Act; (v) the extent to which a cost advances equity principles; and (vi) such other factors as the Commission deems appropriate. The remainder of costs shall be deemed an operating expense and shall be recoverable if found prudent and reasonable by the Commission. The total costs deferred as a regulatory asset shall be amortized over a 15-year period. The unamortized balance shall be recognized as of December 31 for a given year. The utility shall also earn a return on the total of the unamortized balance of the regulatory assets, less any deferred taxes related to the unamortized balance, at an annual rate equal to the utility's weighted average cost of capital that includes, based on a year-end capital structure, the utility's actual cost of debt for the applicable calendar year and a cost of equity, which shall be calculated as the sum of: (I) the average for the applicable calendar year of the monthly average yields of 30-year U.S. Treasury bonds published by the Board of Governors of the Federal Reserve System in its weekly H.15 Statistical Release or successor publication; and (II) 580 basis points, including a revenue conversion factor calculated to recover or refund all additional income taxes that may be payable or receivable as a result of that return. (2) The utility may recover all of the costs through an automatic adjustment clause tariff, on a volumetric basis. The utility may file its proposed cost-recovery tariff together with the tariff it files under subsection (e) of this Section or at a later time. The proposed tariff shall provide for an annual reconciliation, less any deferred taxes related to the reconciliation, with interest at an annual rate of return equal to the utility's weighted average cost of capital as calculated under paragraph (1) of this subsection (i), including a revenue conversion factor calculated to recover or refund all additional income taxes that may be payable or receivable as a result of that return, of the revenue requirement reflected in rates for each calendar year, beginning with the calendar year in which the utility files its automatic adjustment clause tariff under this subsection (i), with what the revenue requirement would have been had the actual cost information for the applicable calendar year been available at the filing date. The Commission shall review the proposed tariff and may make changes to the tariff that are consistent with this Section and with the Commission's authority under Article IX of this Act, subject to notice and hearing. Following notice and hearing, the Commission shall issue an order approving, or approving with modification, such tariff no later than 240 days after the utility files its tariff. (j) No later than 90 days after the Commission enters an order, or order on rehearing, whichever is later, approving an electric utility's proposed tariff under this Section, the electric utility shall provide notice of the availability of rebates under this Section. (Source: P.A. 102-662, eff. 9-15-21; 102-1031, eff. 5-27-22; 103-1066, eff. 2-20-25.) (Text of Section after amendment by P.A. 104-458 ) Sec. 16-107.6. Distributed generation and storage rebate. (a) In this Section: "Additive services" means the services that distributed energy resources provide to the energy system and society that are described in Section 16-107.9. "Distributed energy resource" means a wide range of technologies that are located on the customer side of the customer's electric meter, including, but not limited to, distributed generation, energy storage, electric vehicles, and demand response technologies. "Distributed storage" means energy storage systems that are interconnected behind the customer's meter to the distribution system or interconnected behind the storage system's own meter to the distribution system. "Energy storage system" means commercially available technology that is capable of absorbing energy and storing it for a period of time for use at a later time, including, but not limited to, electrochemical, thermal, and electromechanical technologies, and may be interconnected behind the customer's meter or interconnected behind its own meter. "Smart inverter" means a device that converts direct current into alternating current and meets the IEEE 1547-2018 equipment standards. Until devices that meet the IEEE 1547-2018 standard are available, devices that meet the UL 1741 SA standard are acceptable. "Subscriber" has the meaning set forth in Section 1-10 of the Illinois Power Agency Act. "Subscription" has the meaning set forth in Section 1-10 of the Illinois Power Agency Act. "System-wide grid services" means the benefits that a distributed energy resource provides to the distribution grid for a period of no less than 25 years. System-wide grid services do not vary by location, time, or the performance characteristics of the distributed energy resource. System-wide grid services include, but are not limited to, avoided or deferred distribution capacity costs, resilience and reliability benefits, avoided or deferred distribution operation and maintenance costs, distribution voltage and power quality benefits, and line loss reductions. "Threshold date" means the date 2 years after the effective date of this amendatory Act of the 104th General Assembly or the date on which the utility's tariff or tariffs authorized by Section 16-107.9 take effect, whichever is later. (b) An electric utility that serves more than 200,000 customers in the State shall file a petition with the Commission requesting approval of the utility's tariff to provide a rebate to the owner or operator of distributed generation, including third-party owned systems, that meets the following criteria: (1) has a nameplate generating capacity no greater than 5,000 kilowatts and is primarily used to offset a customer's electricity load, or as otherwise as defined for community renewable generation projects in Section 1-10 of the Illinois Power Agency Act; (2) is located on the customer's side of the billing meter and for the customer's own use; (3) is interconnected to electric distribution facilities owned by the electric utility under rules adopted by the Commission by means of one or more inverters or smart inverters required by this Section, as applicable. For purposes of this Section, "distributed generation" shall satisfy the definition of distributed renewable energy generation device set forth in Section 1-10 of the Illinois Power Agency Act to the extent such definition is consistent with the requirements of this Section. In addition, any new photovoltaic distributed generation that is installed after June 1, 2017 (the effective date of Public Act 99-906) must be installed by a qualified person, as defined by subsection (i) of Section 1-56 of the Illinois Power Agency Act. The tariff shall include a base rebate that compensates distributed generation for the system-wide grid services associated with distributed generation and an additional payment or payments for any additive services identified by the Commission under Section 16-107.9. The distributed generation and storage tariff shall provide that the smart inverter or smart inverters associated with the distributed generation shall provide autonomous response to grid conditions through its default settings as approved by the Commission. Default settings may not be changed after the execution of the interconnection agreement except by mutual agreement between the utility and the owner or operator of the distributed generation. Nothing in this Section shall negate or supersede Institute of Electrical and Electronics Engineers equipment standards or other similar standards or requirements. The tariff shall not limit the ability of the smart inverter or smart inverters or other distributed energy resource to provide wholesale market products such as regulation, demand response, or other services, or limit the ability of the owner of the smart inverter or the other distributed energy resource to receive compensation for providing those wholesale market products or services. (b-5) Within 30 days after the effective date of this amendatory Act of the 102nd General Assembly, each electric public utility with 3,000,000 or more retail customers shall file a tariff with the Commission that further compensates any retail customer that installs or has installed photovoltaic facilities paired with energy storage facilities on or adjacent to its premises for the benefits the facilities provide to the distribution grid. The tariff shall provide that, in addition to the other rebates identified in this Section, the electric utility shall rebate to such retail customer (i) the previously incurred and future costs of installing interconnection facilities and related infrastructure to enable full participation in the PJM Interconnection, LLC or its successor organization frequency regulation market; and (ii) all wholesale demand charges incurred after the effective date of this amendatory Act of the 102nd General Assembly. The Commission shall approve, or approve with modification, the tariff within 120 days after the utility's filing. To be eligible for a rebate described in this subsection (b-5), the owner or operator of the distributed generation shall provide proof of participation in the frequency regulation market. Upon providing proof of participation, the retail customer shall be entitled to a rebate equal to the cost of the interconnection facilities paid to ComEd, regardless of whether the retail customer would have incurred the interconnection costs in the absence of participating in the frequency regulation market, plus the cost of software, telecommunications hardware, and telemetry paid to enable communication with PJM for purposes of participating in the frequency regulation market. A utility providing rebates described in this subsection (b-5) shall be entitled to recover the costs of the rebates as provided for in subsection (h) of this Section. To the extent the electric utility's tariff is modified to comply with this subsection (b-5), it shall file a revised tariff with the Commission within 120 days after the effective date of this amendatory Act of the 104th General Assembly, and the Commission shall approve, or approve with modification, the tariff within 240 days after the Commission initiates the docket. (c) The proposed tariff authorized by subsection (b) of this Section shall include the following participation terms for rebates to be applied under this Section for distributed generation that satisfies the criteria set forth in subsection (b) of this Section: (1) The owner or operator of distributed generation or distributed storage that services customers not eligible for net metering under subsection (d), (d-5), or (e) of Section 16-107.5 of this Act may apply for a rebate as provided for in this Section. The value of the rebate shall be $250 per kilowatt of nameplate generating capacity, measured as nominal DC power output, of that customer's distributed generation. To the extent the distributed generation also has an associated energy storage, then until the threshold date for systems other than community renewable generation projects paired with an energy storage system, the energy storage system shall be separately compensated with a rebate of $250 per kilowatt-hour of nameplate capacity. To the extent that a community renewable generation project is paired with an energy storage system or an energy storage system that is paired with distributed generation, the energy storage system shall be separately compensated with a rebate of $250 per kilowatt-hour of nameplate capacity. A stand-alone energy storage system shall be compensated with a rebate of $250 per kilowatt-hour of nameplate capacity. Any distributed generation device that is compensated for storage in this subsection (1) after the effective date of this amendatory Act of the 104th General Assembly shall participate in one or more programs authorized by paragraph (1) of subsection (e). Compensation for any additive services shall be as determined by the Commission in the proceeding described in Section 16-107.9. To the extent that an electric utility's tariffs are inconsistent with the requirements of this paragraph (1) as modified by this amendatory Act of the 104th General Assembly, the electric utility shall, within 60 days after the effective date of this amendatory Act of the 104th General Assembly, file modified tariffs consistent with the requirements of this paragraph (1). If the Commission chooses to suspend the modified tariffs following notice and hearing, the Commission shall issue an order approving, or approving with modification, the modified tariffs no later than 90 days after the Commission initiates the docket. (2) The owner or operator of distributed generation that, before the threshold date, would have been eligible for net metering under subsection (d), (d-5), or (e) of Section 16-107.5 of this Act and that has not previously received a distributed generation rebate, may apply for a rebate as provided for in this Section. Until December 31, 2029, the value of the base rebate shall be $300 per kilowatt of nameplate generating capacity, measured as nominal DC power output, of the distributed generation. On or after January 1, 2030, the value of the base rebate shall be $250 per kilowatt of nameplate generating capacity, measured as nominal DC power output, of the distributed generation. The owner or operator of distributed generation that, before the threshold date, is eligible for net metering under subsection (d), (d-5), or (e) of Section 16-107.5 of this Act may apply for a base rebate for an associated energy storage device behind the same retail customer meter as the distributed generation, regardless of whether the distributed generation applies for a rebate for the distributed generation device. An energy storage system, whether or not paired with distributed generation, shall be separately compensated at a base payment of $300 per kilowatt-hour of nameplate capacity until the threshold date. After the threshold date, a stand-alone energy storage system shall be compensated with a rebate of $250 per kilowatt-hour of nameplate capacity. Any distributed generation device that is compensated for storage in this subsection (2) has the option to participate in either an hourly pricing program or time-of-use rate program and any distributed generation device that is compensated for storage in this subsection (2) after the effective date of this amendatory Act of the 104th General Assembly shall participate in a scheduled dispatch program set forth in paragraph (1) of subsection (e) when it becomes available. Compensation for any additive services or other programs shall be as determined by the Commission in the proceeding described in Section 16-107.9. To the extent that an electric utility's tariffs are inconsistent with the requirements of this paragraph (2) as modified by this amendatory Act of the 104th General Assembly, such electric utility shall, within 60 days, file modified tariffs consistent with the requirements of this paragraph (2). (3) Upon approval of a rebate application submitted under this subsection (c), the retail customer shall no longer be entitled to receive any delivery service credits for the excess electricity generated by its facility and shall be subject to the provisions of subsection (n) of Section 16-107.5 of this Act unless the owner or operator receives a rebate only for an energy storage device and not for the distributed generation device. (4) To be eligible for a rebate described in this subsection (c), the owner or operator of the distributed generation must have a smart inverter installed and in operation on the distributed generation. (5) The owner or operator of any distributed generation or distributed storage system whose electric service has not been declared competitive under Section 16-113 as of July 1, 2011 or the owner or operator of a community renewable generation project participating in the Adjustable Block Program as a community-driven community solar project as defined in item (v) of subparagraph (K) of paragraph (1) of subsection (c) of Section 1-75 of the Illinois Power Agency Act and that has an interconnection agreement dated after the effective date of this amendatory Act of the 104th General Assembly shall be eligible for an additional payment or payments to the applicable rebate under paragraphs (1) or (2) of this subsection (c) in an amount set by tariff and approved by the Commission if located in an equity investment eligible community, as defined in Section 1-10 of the Illinois Power Agency Act, at the time the interconnection agreement is signed. (d) The Commission shall review the proposed tariff authorized by subsection (b) of this Section and may make changes to the tariff that are consistent with this Section and with the Commission's authority under Article IX of this Act, subject to notice and hearing. Following notice and hearing, the Commission shall issue an order approving, or approving with modification, such tariff no later than 240 days after the utility files its tariff. Upon the effective date of this amendatory Act of the 102nd General Assembly, an electric utility shall file a petition with the Commission to amend and update any existing tariffs to comply with subsections (b) and (c). (e) By no later than June 30, 2026, the Commission shall establish a scheduled dispatch virtual power plant program in which customers that own or operate an energy storage system that receive a rebate for the distributed storage portion under paragraphs (1) and (2) of subsection (c) are required to participate. (1) The scheduled dispatch virtual power plant program shall require an enrollment period of 5 years and require each participating system to commit to dispatch each weekday during the months of June, July, August, and September from 4 p.m. to 6 p.m. for systems interconnected behind the meter of a retail customer and from 4 p.m. to 7 p.m. for systems interconnected on the distribution system of an electric utility and not behind the meter of a retail customer. For stand-alone storage, commitments to dispatch shall be voluntary. Upon petition by the applicable electric utility or on its own motion, the Commission may approve different dispatch schedules provided that dispatch events do not exceed 80 days and shall not exceed 2 hours for systems interconnected behind the meter of a retail customer or 3 hours for systems interconnected on the distribution system of an electric utility and not behind the meter of a retail customer. (2) The scheduled dispatch virtual power plant program shall be open to all customer classes with eligible distributed energy resources and shall measure performance based on combined export of paired resources if the eligible device is inverter-based renewables paired with storage through at least December 31, 2030 and until the Commission approves and the utility implements a tariff under subsection (d) of Section 16-107.9 of this Act, at which time such customers shall be transitioned to that tariff in a manner prescribed in the tariff. The scheduled dispatch virtual power plant program shall be required for all community renewable generation projects paired with distributed energy resources without regard to the threshold date. (3) Compensation shall be set by the Commission but shall not be less than $10 per kilowatt of average dispatch during identified hours, paid to enrolled customers or project owners at end of program year. For distributed generation interconnected to an electric utility's distribution system and not behind the meter of a retail customer, dispatch to determine compensation shall be measured at point of interconnection. For distributed generation and storage interconnected behind the meter of a retail customer, dispatch to determine compensation shall be measured at the inverter connected to the storage device. (4) No later than June 1, 2026, each public utility shall file an initial scheduled dispatch virtual power plant tariff. The Commission shall approve, or approve with modifications, the initial scheduled dispatch virtual power plant tariff for each utility not later than June 30, 2026. (5) The Commission, by its own motion or by petition by an electric utility, may establish other additive services programs in addition to the virtual power plant program under Section 16-107.9. Nothing in this Section is intended to preempt or delay the implementation of other utility programs for devices that are not a part of the scheduled dispatch virtual power plant program that the Commission or utility may propose or require. (6) No later than December 31, 2028, the utilities shall file with the Commission a report that includes information on the following: (A) the number of participants in the scheduled dispatch program; (B) impacts to energy supply prices and wholesale market activities; (C) impacts on distribution system investments and planning; and (D) any potential pathways by which the virtual power plan program described in Section 16-107.9 may be designed to capture wholesale market value through participation in the wholesale market and apply that wholesale market revenue to reduce utility distribution or electric supply rates for customers. (f) Notwithstanding any provision of this Act to the contrary, the owner or operator of a community renewable generation project as defined in Section 1-10 of the Illinois Power Agency Act whether or not a paired energy storage system or the owner or operator of an energy storage system that is eligible for net metering under subsection (l-10) of Section 16-107.5 shall also be eligible to apply for the rebate described in this Section. The owner or operator of the community renewable generation project whether or not a paired energy storage system or the owner or operator of an energy storage system that is eligible for net metering under subsection (l-10) of Section 16-107.5 may apply for a rebate only if the owner or operator, or previous owner or operator, of the community renewable generation project whether or not a paired energy storage system or the owner or operator of an energy storage system that is eligible for net metering under subsection (l-10) of Section 16-107.5 has not already submitted an application, and, regardless of whether the subscriber is a residential or non-residential customer, may be allowed the amount identified in paragraph (1) of subsection (c) applicable on the date that the application is submitted. (g) The owner of a distributed storage system, whether or not paired with distributed generation, may apply for the rebate or rebates approved under this Section at the time of execution of an interconnection agreement with the distribution utility and shall receive the value available at that time of execution of the interconnection agreement. The utility shall issue the rebate no later than 60 days after the project is energized. In the event the application is incomplete or the utility is otherwise unable to calculate the payment based on the information provided by the owner, the utility shall issue the payment no later than 60 days after the application is complete or all requested information is received. (h) An electric utility shall recover from its retail customers all of the costs of the rebates made under a tariff or tariffs approved under this Section, including, but not limited to, the value of the rebates and all costs incurred by the utility to comply with and implement subsections (b), (b-5), (c), and (e) of this Section, consistent with the following provisions: (1) The utility shall defer the full amount of its costs as a regulatory asset. The total costs deferred as a regulatory asset shall be amortized over a 15-year period. The unamortized balance shall be recognized as of December 31 for a given year. The utility shall also earn a return on the total of the unamortized balance of the regulatory assets, less any deferred taxes related to the unamortized balance, at an annual rate equal to the utility's weighted average cost of capital that includes, based on a year-end capital structure, the utility's actual cost of debt for the applicable calendar year and a cost of equity, which shall be equal to the baseline cost of equity approved by the Commission for the utility's electric distribution rates case effective during the applicable year, whether those rates are set pursuant to Section 9-201, subparagraph (B) of paragraph (3) of subsection (d) of Section 16-108.18, or any successor electric distribution ratemaking paradigm. When an electric utility creates a regulatory asset under the provisions of this paragraph (1) of subsection (h), the costs are recovered over a period during which customers also receive a benefit, which is in the public interest. Accordingly, it is the intent of the General Assembly that an electric utility that elects to create a regulatory asset under the provisions of this paragraph (1) shall recover all of the associated costs, including, but not limited to, its cost of capital as set forth in this paragraph (1). After the Commission has approved the prudence and reasonableness of the costs that comprise the regulatory asset, the electric utility shall be permitted to recover all such costs, and the value and recoverability through rates of the associated regulatory asset shall not be limited, altered, impaired, or reduced. To enable the financing of the incremental capital expenditures, including regulatory assets, for electric utilities that serve less than 3,000,000 retail customers but more than 500,000 retail customers in the State, the utility's actual year-end capital structure that includes a common equity ratio, excluding goodwill, of up to and including 50% of the total capital structure shall be deemed reasonable and used to set rates. (2) The utility, at its election, may recover all of the costs as part of a filing for a general increase in rates under Article IX of this Act, as part of an annual filing to update a performance-based rate under Section 16-108.18, or through an automatic adjustment clause tariff, provided that nothing in this paragraph (2) permits the double recovery of such costs from customers. If the utility elects to recover the costs it incurs under subsections (b), (b-5), (c), and (e) through an automatic adjustment clause tariff, the utility may file its proposed tariff together with the tariff it files under subsection (b) of this Section or at a later time. The proposed tariff shall provide for an annual reconciliation, less any deferred taxes related to the reconciliation, with interest at an annual rate of return equal to the utility's weighted average cost of capital as calculated under paragraph (1) of this subsection (h), including a revenue conversion factor calculated to recover or refund all additional income taxes that may be payable or receivable as a result of that return, of the revenue requirement reflected in rates for each calendar year, beginning with the calendar year in which the utility files its automatic adjustment clause tariff under this subsection (h), with what the revenue requirement would have been had the actual cost information for the applicable calendar year been available at the filing date. The Commission shall review the proposed tariff and may make changes to the tariff that are consistent with this Section and with the Commission's authority under Article IX of this Act, subject to notice and hearing. Following notice and hearing, the Commission shall issue an order approving, or approving with modification, such tariff no later than 240 days after the utility files its tariff. (i) (Blank). (j) No later than 90 days after the Commission enters an order, or order on rehearing, whichever is later, approving an electric utility's proposed tariff under this Section, the electric utility shall provide notice of the availability of rebates under this Section. (k) No later than January 1, 2030, the utilities shall file with the Commission a report that includes: (1) the number and geographic distribution of participants receiving rebates pursuant to this Section; (2) impacts to energy supply prices and wholesale market activities; (3) impacts on distribution system investments and planning; and (4) any other values deemed relevant by the Commission. (l) Upon petition by the applicable electric utility or on its own motion, the Commission may adjust rebate levels for new customers and make other appropriate changes to the rebate program in a manner that is consistent with the State's clean energy goals and the public interest.

Legislative History

(Source: P.A. 103-1066, eff. 2-20-25; 104-458, eff. 6-1-26.)